The head of the International Monetary Fund urged countries to move “swiftly” to resolve trade disputes that threaten global economic growth.
IMF Managing Director Kristalina Georgieva said the unpredictability arising from President Donald Trump’s aggressive campaign of taxes on foreign imports is causing companies to delay investments and consumers to hold off on spending.
“Uncertainty is bad for business,” she told reporters on Thursday during a briefing at the spring meetings of the IMF and its sister agency, the World Bank.
Georgieva’s comments came two days after the IMF downgraded its outlook for world economic growth this year. The 191-country lending organisation, which seeks to promote global growth, financial stability, and reduce poverty, also sharply lowered its forecast for the United States. It said the chances that the world’s biggest economy would fall into recession have risen from 25% to about 40%.
Georgieva warned that the economic fallout from trade conflict would fall most heavily on poorer countries, which do not have the fiscal room to offset the damage.
Since returning to the White House in January, Trump has aggressively imposed tariffs on US trading partners. Among other things, he has slapped 145% import taxes on China and 10% on almost every country in the world, raising US tariffs to levels not seen in more than a century. However, he has repeatedly changed US policy — suddenly suspending or altering the tariffs — leaving companies bewildered about his goals and ultimate intentions.
Trump’s tariffs — a sharp reversal of decades of US policy in favour of free trade — and the resulting uncertainty around them have triggered a prolonged sell-off in financial markets. But stocks rallied on Wednesday after the Trump administration signalled it is open to reducing the massive tariffs on China. “There is an opportunity for a big deal here,” US Treasury Secretary Scott Bessent said Wednesday.
